Keith has never particularly cared for doing books, and perhaps he never will, but he and Dorothy have committed themselves to fine-tuning the financial side of their operation because that is what the environment demands. It may be months or even years before their strapped lender regains the confidence it once had in their operation, but the Kuhns say they understand their financial situation better than they ever have. In 1982, their budget was 95% accurate, 3% under what Ferguson tells them they should be able to accomplish but better than most of their neighbors. They have sales goals, profit goals, and clearly defined strategies for achieving them, as well as a more accurate system for measuring what they have and haven't accomplished than they and most of the Minot audience imagined possible.
"It is not a miraculous manna that falls from heaven" says Ferguson to the Minot farmers. He is talking about budgeting with 95% to 98% accuracy. The light catches the diamond in his ring as he gestures. "I know a lot of you will say that's impossible, because of the weather, crop prices, diseases. But it will end forever crisis management." It is near the close of a long day and an exhausting night. The farmers have asked how they can hedge if the crops they grow aren't traded on the commodities exchange, what they can do if they are stuck with land they bought in the '70s, and how they will ever be able to pay their bills. These are questions to which the answers are long and complicated, sometimes requiring more knowledge about the particular farmer's situation than in most cases the farmers have themselves. But Ferguson and Van Dusen will stand there as long as the questions are asked, bccause it is here, in places like the Minot Holiday Inn, not the in halls of Congress, that the real revolution in U.S. agriculture is taking place.
Farmers in North Dakota have it tough. The Haugebergs can't hedge durum wheat, sunflower seeds, or flax. The droughts, hail, and early frosts may demand more of an investment in equipment and insurance than current operations will support. Farmers who did not have livestock were particularly hard hit by the grain embargo, because the failure of 10% of exports to make its way to the Soviet Union through France or South America cut grain prices 40%. The government has never successfully intervened in the market for major commodities, says Ferguson, and the embargoes made life extraordinarily difficult for crop farmers. The livestock sector is the most free of federal regulation and marketplace intervention, and Ferguson says, "I don't think it's coincidental that it's been the most profitable and efficient."
But still, Ferguson says, although 15% of the problems of U.S. farmers can be attributed to the government and maybe another 15% to the lenders who provided poor advice, lent money, or held back from lending when they shouldn't have, 70% of the responsibility for the problems farmers have today lies squarely on their own broad shoulders.
"It's inexcusable that corn is $1.95, Ferguson says of the price corn fetched per bushel last fall. "I feel for the farmers. But a year ago they could have sold their corn for $2.60. The fact that corn is $1.95 is terrible. But the fact that a big producer is going to take it is inexcusable.
"Some years you have to sell at a loss, but at least it should be a controlled loss, not some wild slide downward. I had a client in the South who rode the soybean market $400,000 down. It got to the point where he said, 'Roy, I can't sell.' And he could have made a profit."
The hour is late, and Ferguson doesn't give the farmers his lecture about this year's 80% chance of a hard winter. "There's going to be snow on the ground in March. There have got to be so many therms in the ground for a seed to germinate. You can't put seeds in before the soil is ready, or they'll rot. So you plan on early germinating seeds. That means you're giving up 3% to 4% of your yield, but that's better than losing 100% of your crop to frost. If it's going to be a hot, dry summer and, if you're not irrigated you've got to reduce the seed population and reduce the fertilizer, because if you don't get water the fertilizer will burn the crop up. But that's better than slapping the seed in the ground like they did in 1980. They got 35% of their crop, with the expenses of a 100% crop."
There are trends in energy, in natural gas prices, and in petroleum fertilizer, Ferguson tells them. They can get interest rate forecasts. He has an inch-thick file on the weather.
"The key," he says, "is eliminating surprises."
The farmers are sitting without saying much. When there are no more questions from the floor, most of the farmers wander out to sit by the pool, in the Islander bar, or in their rooms or to drive home in the light snow that is just beginning to fall. But Ferguson, his fingers blue from the magic marker he has been using to scribble figures on the board, his shirt collar wilted, is bent over one of the Formica tables, talking with the last farmer left in the room about how that farmer might survive.
